“Brussels, we have a problem” Jaume Garau speaks on EU regional cohesion policies

News / 05.5.14

Jaume Garau, author of the report on The fiscal balance of stateless nations with the European Union by the Centre Maurits Coppiters and Fundació Emili Darder, believes that “The EU’s Regional Policy is aimed at encouraging more harmonious economic growth among the different European territories. The problem is a lack of transparency when it comes to the criteria by which European investments are distributed within the different territories of a state. Anomalous situations arise frequently today. There are regions with similar incomes that receive very different sums from European financing. This is the case of Northern Ireland and the Balearic Islands, to name but two. They make large contributions to the community budget, but only receive tiny investment capital from the EU. We need the Governments of Member States to clearly explain the criteria used when deciding on how the investment capital is distributed”

The above mentioned research is focused on how Cohesion funds impact on the specific cases of Aragon, Scotland, the Basque Country, Flanders, Galiza, Wales And Catalonia, Valencia and the Balearic islands.

Authors claim that even though redistribution mechanisms of European Funds are established by Brussels, state governments have plenty of leeway to decide how much of the European aid is in the end assigned to each region within the state. In other words, the governments in Madrid and London, for example, enjoy significant capacity to decide how much of the European Funds goes to each region within the State.

This capacity held by the governments of Member States can – at times – distort the initial purpose of the Cohesion Policy. The lack of transparency and clear criteria and targets about how European Funds are assigned among the regions within a State often leads to tension concerning the final sharing out of EU aid among regions: paradoxes occur in which areas with very similar per capita income and populations receive very different levels of European financing.

There are some cases of regions which have the same per capita income and the same population, however, they receive over three times more European Funds investments than others. In this case, the European Regional Policy does not help to harmonise the differences, but rather increase them.

The purpose of this study is to analyse what a series of regions receive in European Funds and what they contribute – in tax – to the European Union budget. The end target is to come up with a new tool to better evaluate the European Regional Policy and its effects.

The report will be available as of 9 of May- Europe Day –  in our policy paper’s section.